Certified Trading Chains in Mineral Production (CTC)
Certified Trading Chains (CTC)in Mineral Production
Pilot Project Rwanda: Gudrun Franken, Philip Schütte, Jürgen VastersMineral Certification DRC: Dirk Küster, Uwe Näher, Bali BarumeAnalytical Fingerprint: Frank Melcher, Torsten Graupner, Thomas Oberthür
Tervuren, December 2, 2010
Certified Trading Chains in Mineral Production (CTC)
• civil wars in central Africasince the late 1990s havelead to militarisation ofmineral production andtrade in eastern DRC
• tin, tantalite, tungsten(TTT) minerals and gold,mainly mined in easternDRC
• human right violations aswell as illegal taxation byarmed groups
Conflict Minerals – Regional Perspective
International Alert (2009)
Certified Trading Chains in Mineral Production (CTC)
Conflict Minerals – Trading Chain
Artisanal mining
Trader A
Trader B
Trading center
Export/(import)
Upstream DRC Upstream Rwanda
Artisanal mining
Company
(Trading center)
Export
Refiner
Industrialmanufacturer
Electronicindustry
End user
Downstream
risks
Illegalexploitation/trade taxes
Fraud/smuggling
Mixing ofmaterial
Due
dili
genc
e
Certified Trading Chains in Mineral Production (CTC)
Conflict Minerals – Mining Conditions
• labour intensive, low degree of mechanisation• very low productivity, lack of investment• difficult market access, low added value• poor working and security conditions• high environmental impact• undesireable social developments (migration, child labour)• usually informal, often illegal, partly associated with armed conflicts• often the only source of income in the region
Formalisation and legalisation of ASM is neccessary to utilize itspotentials for poverty reduction and sustainable development
Artisanal gold mining inKilo Moto, Ituri (DRC)
Certified Trading Chains in Mineral Production (CTC)
reportscommissions
requestsNa#onalCer#fica#on Unit
reportsIndependentAuditor
Client:Industrial consumer
feedback
dialogueaccompanies
Interna0onalpartnership
Government ofproducer country
consult, support supports
ExpertsGovernment of
consumer country
supervision
evaluatestraceability
Producer:Coopera0ve,
Small-‐scale mining
evaluatesperformance
income
requests
Trading chain
Certified Trading Chains in Mineral Production (CTC)
• certify producers of conflict minerals (Sn, Ta, W, and Au ore) inRwanda & DRC against CTC standards– origin and traceability– corporate social responsibility– evaluation of mineral producer performance and mineral
traceability along the trading chain by independent auditor
• funding by BMZ (DRC), BMZ/BMWi (Rwanda)
CTC Mineral Certification – Key Elements
→ improved market access and working conditions for ASM
→ fosters stability and may augment state revenues through ASM formalization
→ supply security for downstream trading chain stakeholders through constructive engagement
Certified Trading Chains in Mineral Production (CTC)
traceability, transparency
labor &working
conditions
security communitydevelopment environment
mineral origin
fiscal obligations
revenuetransparency
opposecorruption
salary level
child labor
workersorganization
protective &productionmeans
health &safety
training
risk assessment
capacity structureddialoguelocal business
integratedsupport
free, priorinformedconsent
gender
EIA
waste disposal
provisions forrehabilitation
5 pr
inci
ples
20 s
tand
ards
Certification Standards (Rwanda)
Certified Trading Chains in Mineral Production (CTC)
• qualified auditor, independent 3rd party• in line with ISO 19011:2002 (ICGLR
requirement)• in-depth review of
– trading chain structure,transparency, conformitywith national law
– mineral traceability from mine toexport
– performance evaluation of corporatesocial responsibility
• data analysis report– recommendations for improvement
CTC Audit Procedure
Certified Trading Chains in Mineral Production (CTC)
• based on verifiable documentation, siteinspections, interviews
• includes mining, transport, storage, export– may evaluate any given traceability system
(e.g., iTSCi-based tagging)• includes all organizational levels
– artisanal miners & subcontractors– mining companies & security forces– traders & export handlers– government (e.g., reports, mine inspections)
• plausibility check of production figures• AFP verification possible
– extensive database available in Rwanda forTa (Sn, W in development)
– discourage illegitimate actors for fear of beingexposed
– regular integrity control of trading chainsor/and follow-up on anomalies possible
Rutongo, Rwanda
CTC Audits – Mineral Traceability
Certified Trading Chains in Mineral Production (CTC)
• Government– OGMR (mine inspections, oversight)– BGR (technical assistance)– MINIFOM (mining sector governance)– MINICOM (mineral trade & export)– RBS (standards & certification)
• Industry (voluntary)– Natural Resources Development / [H.C. Starck (Sn, Ta, W)]– Rutongo Mines, Eurotrade Int. (Sn, W)– Gatumba Mining Concessions / Kivu Resources (Ta, Sn)– Wolfram Mining & Processing / Wolfram Bergbau &
Hüttengesellschaft (W)– Pyramides (Ta)/ Ningxia * certification workgroup Rwanda
Rutsiro
GatumbaNemba
Rutongo/Ny.
Gifurwe
Cyubi*
Major mines in Rwandaparticipating in CTC
CTC Rwanda – Stakeholders
Certified Trading Chains in Mineral Production (CTC)
Project focus• Structure of mining sector
– OGMR reliable partner with improving capacities(but still needs more people…)
– Artisanal mining, but in cooperation with smallmining companies = concession holder
• Building of best practice in Rwandanmining sector– as realistic for ASM conditions (standards)– improve competitive image
• Cooperation with ITRI on mineraltraceability through OGMR– iTSCi is being implemented at CTC mines
• Certification available in Q1/2011
Rutsiro
GatumbaNemba
Rutongo/Ny.
Gifurwe
Cyubi
Major mines in Rwandaparticipating in CTC
CTC Rwanda – Key Elements
Certified Trading Chains in Mineral Production (CTC)
• 2007-2009: development of CTC standard draft in internationalconsultation process– initiated at the G8 summit in Heiligendamm, April 2007
– further standard revision on-going (RBS, workgroup)
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
• 2007-2009: development of CTC standard draft in internationalconsultation process
• 09/2008: cooperation OGMR-BGR on CTC starts
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
• 2007-2009: development of CTC standard draft in internationalconsultation process
• 09/2008: cooperation OGMR-BGR on CTC starts
• 03/2009: planning workshop „Mineral Certification in Rwanda“ withnational stakeholders in Kigali
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
• 2007-2009: development of CTC standard draft in internationalconsultation process
• 09/2008: cooperation OGMR-BGR on CTC starts
• 03/2009: planning workshop „Mineral Certification in Rwanda“ withnational stakeholders in Kigali
• 05-08/2009: 5 major Rwandan mineral producers volunteer toparticipate in CTC as project partners
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
• 2007-2009: development of CTC standard draft in internationalconsultation process
• 09/2008: cooperation OGMR-BGR on CTC starts
• 03/2009: planning workshop „Mineral Certification in Rwanda“ withnational stakeholders in Kigali
• 05-08/2009: 5 major Rwandan mineral producers volunteer toparticipate in CTC as project partners
• 08/2009-03/2010: baseline audits of 4 Rwandan mineral producersby independent auditor– suggestions for improvement
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
• 05/2010-on-going: improvement of mining practice, mineraltraceability and transparency in Rwanda– certification workgroup (OGMR, BGR, RBS, MINICOM, MINIFOM) formed in
August 2010
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
• 05/2010-on-going: improvement of mining practice, mineraltraceability and transparency in Rwanda
• 10-12/2010: certification audits of 4 Rwandan mineral producersby independent auditor– baseline audit for 5th producer
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
• 05/2010-on-going: improvement of mining practice, mineraltraceability and transparency in Rwanda
• 10-12/2010: certification audits of 4 Rwandan mineral producersby independent auditor
• Q1 2011: decision on certification status of Rwandan mineralproducers– RBS in cooperation with the certification workgroup
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
• 05/2010-on-going: improvement of mining practice, mineraltraceability and transparency in Rwanda
• 10-12/2010: certification audits of 4 Rwandan mineral producersby independent auditor
• Q1 2011: decision on certification status of Rwandan mineralproducers– RBS in cooperation with the certification workgroup
• 04/2011: certification conference in Kigali– In cooperation with ICGLR
20092008 2010 2011
CTC Rwanda – Roadmap & Milestones
Certified Trading Chains in Mineral Production (CTC)
pilot sites
Nyabibwe:Sn, Ta, W;ITRI coop.
Mineral Certification DRC – Stakeholders
Mukungwe: AuLulingu: Sn
Misisi: Au
• partnering with DRCMinistry of Mines, e.g.– SAESSCAM– CEEC
• focus on South KivuProvince– extension possible
• Objectives:– develop/implement
traceability system– capacity building of DRC
sectoral institutions– integration of certification
scheme into nationallegislation
Certified Trading Chains in Mineral Production (CTC)
Project status• planning workshops in Kinshasa and Bukavu (Feb/March 2010)• established Kinshasa & Bukavu offices; Goma office planned (North Kivu extension; Q1/2011)• certification workgroup at the DRC Ministry of Mines
• definition of standards• development of national certification concept
• preparation of certification manuals for (1) Sn-Ta-W and (2) Au (Oct 2010)
Mineral Certification DRC – Roadmap
Certified Trading Chains in Mineral Production (CTC)
Planned/on-going activities• capacity development of Congolese sector institutions in Kinshasa and S. Kivu (on-going):
• SAESSCAM• Mines Administration Bukavu
• auditing CEEC‘s internal risk control and assurance mechanisms• consultancy to small-scale miners, traders, and comptoirs on certification (on-going)• baseline audits of pilot mines in South Kivu (Q1/2011)
• problem: access to pilot sites (security)
Mineral Certification DRC – Roadmap
Certified Trading Chains in Mineral Production (CTC)
Mineral Certification DRC – Ideal Scheme
DR Congo
World Market(via Tanzania/Kenya)
Artisanalmines
Centre deNégoce Comptoirs Traders
Import/Export
Refiners
IndustrialManufacturersSAESSCAM
records prod.;CTC certif. of
mine sites
CEECIssues exportcertificates
RwandaBurundiUganda
Adm. des Mines Sud Kivu
oversees trade near ASM sites
data exchange
External auditor assesses trading chain
Traceability: docs, sealing, transport surveillance, statistics, AFP
Certified Trading Chains in Mineral Production (CTC)
• RINR (RegionalInitiative against theIllegal Exploitation ofNatural Resources)– OECD guidance as
additional RINR tool?• ICGLR provides
framework (regional)– ICGLR aims to
coordinate initiatives inthe region
– implementation up tomember states
• CTC = contribution toICGLR’s regionalmineral certificationscheme
Mineral Certification – Regional Perspective
Certified Trading Chains in Mineral Production (CTC)
• Phase 1: harmonized export documentation• Phase 2: mineral traceability
– Tagging system– Tracking of mineral flow through data base– Implemented at Kalimbi (South Kivu) from March-September 2010– Implemented at Rutongo (Rwanda) since October 2010– Channel Research: develop 3rd party audits to check validity of iTSCi
scheme• Phase 3: CSR standards (planned)
• There is no direct competition between iTSCi (traceability scheme) andCTC (certification system on multiple standards)– complementing each other
Some facts about ITRI/iTSCi
Certified Trading Chains in Mineral Production (CTC)
country-specific certification standards developed- adjusted to ASM reality
contribution to ICGLR certification scheme
- coordination with other initiatives
RWANDA certification audits done/underway
- covering the major Rwandan Sn, Ta, and Wore producers
- implementation into national structures on-going
initial decision on certification expectedfor Q1/2011
DRC acceleration of activities in Q1/2011
- once eastern provinces mining ban stops- baseline audits
CTC – Conclusions
Certified Trading Chains in Mineral Production (CTC)
Webhttp://www.bgr.bund.de/[email protected]
CTC RwandaDr Gudrun [email protected] Philip Schü[email protected]
Mineral certification DRCDr Dirk Kü[email protected] Nä[email protected]
CTC Contacts
THANK YOUFOR YOURATTENTION
Certified Trading Chains in Mineral Production (CTC)
Standard 1.1: Origin and production volume of minerals fromthe mine site throughout the trading chain are traceable.
4 = Producer and buyer plausibly declare amount, type, and origin of mineral shipments clearly, correctly and verifiably at the mine, at points where material is aggregated, as well as at export and import sites. Producer and buyer take appropriate measures to ensure the integrity of mineral shipments and allow for an independent third party to take any mineral sample at any time for AFP analysis.
Assurance of origin by means of CTC: compliance level 4 is a prerequisite for passing CTC certification data are verified on site by independent auditor plausibility check by auditor: site inspections, key informant interviews compatible with any traceability system provided it is efficient and verifiable AFP: Analytical Fingerprint – independent checking instrument available
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